The Philippines’ plan to increase liquefied natural gas (LNG) imports by over 500% in the next four years will likely raise electricity costs and expose the country to volatile global markets, a new study warned.
Research by Zero Carbon Analytics (ZCA) and the Center for Renewable Energy and Sustainable Technology (CREST) estimates LNG imports will cost USD 3.9 billion by 2029, with infrastructure spending pushing the total to USD 5.4 billion. These costs could drive gas-fired generation prices up by as much as 24%.
“The Philippines has had the third-highest electricity prices in Asia over the past two years. Our analysis shows that importing more gas will likely raise those prices,” said Yu Sun Chin of ZCA. “Instead of importing LNG and building costly LNG infrastructure, the government should look instead to the country’s huge potential for solar and wind.”
CREST president Rei Panaligan said reliance on imported fuel has burdened households and industry. “LNG imports are very expensive and the rising gas price will continue to expose the country to a volatile global market,” he said. “The Philippine government should invest further for more renewables and to start closing permanently the door to fossil fuels.”
The report comes as the government positions LNG as a transition fuel under the Philippine Natural Gas Industry Development Act. But experts say the strategy risks locking in high costs.
“A three-fold increase in the country’s LNG import bill over the next four years is fundamentally incompatible with efforts to reduce household electricity prices,” said Sam Reynolds of the Institute for Energy Economics and Financial Analysis (IEEFA). “Extreme volatility is part and parcel of global LNG markets.”
While short-term imports may be needed, Reynolds stressed the urgency of shifting course. “Supporting the rapid deployment of low-cost, domestically sourced renewables will be critical. Not only for economic growth and sustainability, but also for energy security.”
